The importance of technology to residential property sales – and in turn the investors participating in the market – is once again in the spotlight with Royal LePage’s latest brokerage acquisition in Metro Vancouver.
Royal LePage Elite West, based in Port Coquitlam with offices in Maple Ridge and Abbotsford, announced April 2 that it had shed the Keller Williams banner, becoming the largest-ever Keller Williams conversion Royal LePage has seen as brokerages reassess their affiliation in the wake of turmoil in the U.S.
“They’re happy to be joining a Canadian company,” Phil Soper, president and CEO of Royal LePage, explained to Western Investor last week as he returned from events in Â鶹´«Ã½Ó³»marking the transfer, which adds 175 agents for an initial 10-year term under the Royal LePage banner.
Royal LePage Little Oak (formerly Re/Max Little Oak), another recent acquisition added 150 agents to the Royal LePage banner last November.
All told, Royal LePage has 20,000 agents in 650 offices nationwide. Re/Max has a similar scale, while Keller Williams operates just 23 offices.
“The American firms have been under a lot of pressure from the market in the past couple of years in the U.S., and there’s been a series of lawsuits and very big-number settlements in the United States,” Soper said.
Most recently, the National Association of Realtors agreed in March to pay US$418 million to settle a class action lawsuit alleging that it had colluded with certain brokerages to inflate the commissions payable on deals.
Rather than the standard 6 per cent commission, home buyers and sellers would be able to negotiate fees with their agents upfront.
Keller Williams agreed to a US$70 million settlement in February, while Re/Max agreed to a US$55 million settlement last October.
“The role of banks, lawyers, and accountants is all different. Commissions – the way people are paid is different,” Soper explained of the differences between Canada and the U.S. “The practices in Canada are different. Consumers pay different fees (lower fees), and regulations are driven by the Canadian Real Estate Association are quite different from those driven by the National Association of Realtors.”
The technology underpinning the platforms that manage the flow of information between parties and among agents, is also different.
“We create systems designed for realtors operating in Canada,” Soper said of the approach Royal LePage has taken. “The large American firms operating in Canada do not. They have one system operating on both sides of the border. It can be frustrating.”
The point is similar to one Ross McCredie made last year with the acquisition of Sutton Group, the country’s other major homegrown brand alongside Royal LePage.
“I’ve watched enough U.S. corporations come into Canada and not do well or serve as anything unique,” McCredie said of his investment, which set the stage for even greater investment in the technology supporting the business. “It’s really us supporting the franchise owners with new technology, refurbishing the brand and having a strong voice in the Canadian marketplace.”
In the case of Royal LePage, the base platform is rlpSPHERE, which includes an artificial intelligence-powered Smart CRM and behavioural automation tool.
Quick Quote, a tool offering preliminary valuations for properties across the country, gives property owners enough information to satisfy their curiosity while inviting them to call an agent for specifics and to discuss further.
Royal LePage is also debuting the provision of transaction data for properties in Ontario and Nova Scotia, with plans to roll out the service countrywide as local real estate boards sign on.
This summer, it will launch Royal LePage Investors Edge, a service designed specifically for property investors.
“That transparency and openness in providing information and data builds trust in the brand and by extension, trust in our front-line people,” Soper said. “The successful firms continue to invest. … They’re investing more in tools for valuation and insight and comparison, and they are taking it to the consumers.”
